afore STATE OF FLORIDA LADY DEPARTMENT OF BUSINESS & PROFESSIONAL REGULATION ~ FLORIDA REAL ESTATE APPRAISAL BOARDLB | | AM 10: 99 FLORIDA DEPARTMENT OF BUSINESS & PROFESSIONAL REGULATION, NISTRATIVE DIVISION OF REAL ESTATE, : GS Petitioner, \(0-Ob59 v. CASE NO. 2008006936 JOHN LESLIE HENTZ, Respondent. / ADMINISTRATIVE COMPLAINT The Florida Department of Business & Professional Regulation, Division of Real Estate ("Petitioner") files this Administrative Complaint against John Leslie Hentz(“Respondent"), and alleges: ESSENTIAL ALLEGATIONS OF MATERIAL FACT 1. Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, including Section 20.165 and Chapters 120, 455 and 475 of the Florida Statutes, and the rules promulgated thereunder. 2. Respondent is currently a Florida state certified residential real estate appraiser having been issued license 6242 in accordance with Chapter 475 Part II of the Florida Statutes. 3. The last license the State issued to Respondent was as a state certified residential real estate appraiser at 286 Forest Park Circle, Panama City, Florida 32405. H:A\FREAB\HENTZ.doc FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint 4. On or about October 5, 2007 Respondent developed and communicated an appraisal report (Report) on property commonly known as 6903 N. Lagoon Drive, #32, Panama City Beach, Florida 32408 (Subject Property). A copy of the Report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. 5. Petitioner received a complaint from a state certified general real estate appraiser, Michael Carroll (Carroll) alleging that Respondent had failed to use available and more appropriate comparable sales in the Subject Property’s neighborhood, had utilized comparable sales the complainant believed were inappropriate, and misstated the condominium housing trends as being a stable market, with supply and demand in balance, and marketing times being 3-6 months, when they were not. 6. Respondent committed the following errors or omissions in the Report: A) Respondent failed to state the 2006 real estate taxes for the Subject Property; B) Respondent listed the project name as Grand Lagoon Cove Condominiums Unit 37, when the correct unit number was 32; C) Respondent listed condominium marketing trends as being a stable market, supply and demand in balance, and 3-6 months marketing time; H:\FREAB\HENTZ.doc 2 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint D) Respondent misstated the specific zoning classification as “condominium” and the zoning description as “residential,” while the Bay County Property Appraiser’s office lists the zoning as R5- Multi-Family and the property type as condominium; E) Respondent noted the Report data sources for project information as “Property Appraiser, Files, Owner,” failing to mention MLS listings contained in Respondent's work file; F) Respondent misstated that the roof was metal; G) Respondent misstated that the interior floors were asphalt shingle; H) Respondent stated that his research did not reveal any sales or transfers of the Comparable Sales within one year prior to date of sale of the Comparable Sales, when in fact Comparable Sale 2 sold on November 13, 2006 for $206,000; I) Respondent reported a non-existent sale of the Subject Property on March 29, 2004, when in fact the prior sale was on December 3, 2003 placing this misinformation in the prior sales history grid, in the analysis narrative that followed, and on the FIRREA/USPAP Addendum page; J) Respondent entered “N/A” when indicating the comparable properties listed for sale, when in fact there were two such listings in the same neighborhood at 6904 N. Lagoon Drive, #43, HAFREAB\HENTZ.doc 3 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint Panama City Beach, Florida and 6903 N. Lagoon Drive, #41, Panama City Beach, Florida; K) Respondent entered “N/A” when indicating the comparable sales in he subject neighborhood, failing to note a sale of 6903 N. Lagoon Drive, #35 on June 1, 2007, which was also a one bedroom, one bath unit similar to the Subject Property; L) Respondent failed to utilize 6903 N. Lagoon Drive, #35 as a possible Comparable Sale claiming the sale was not an arms length transaction after allegedly contacting the listing agent, who confirmed to the Petitioner’s investigator that the sellers were motivated to sell by falling market prices and not duress; M) Respondent misstated the actual age of the Subject Property and Comparable Sale 3; N) Respondent failed to include the unit number of Comparable Sale 1; oO) Respondent misstated the amenities of the various Comparable Sales, including a tennis court but failing to include a gazebo, hot tub, dock and assigned parking for Comparable Sale 1; misstated that Comparable Sale 2 had a swimming pool when it only had a dock and Bar-B-Q pit; and failed to state the full amenities of Comparable Sale 3 including a playground, gazebo, Pavilion and Clubhouse in addition to the disclosed swimming pool, dock and H:AFREAB\HENTZ.doc 4 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint tennis courts, as set forth in the MLS listings contained in Respondent’s work file; P) Respondent misstated that Comparable Sale 3 was lagoon front when it was not; Q) Respondent misstated that Comparable Sale 3 was a townhouse design when it was a single story manufactured/modular home; R) Respondent misstated that Comparable Sale 2 was a first floor unit when it was located on the second floor; S) Respondent noted the frame construction of Comparable Sale 3, unlike the Subject Property and Comparable Sales 1 and 2, but made no adjustment for quality of construction; T) Respondent misstated the prior sale date and amount for Comparable Sale 3, which was actually on June 19, 2007 for $213,500; U) Respondent stated that the Subject Property consisted of three rooms, including one bedroom and one bath, but drew a kitchen, dining area and living room on the Subject Property sketch; V) Respondent failed to reconcile information in the Report on total room count showing Comparable Sales 1, 2, and 3, respectively, as having four rooms, while MLS listing sheets HAFREAB\HENTZ.doc 5 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint contained in Respondent’s work file showed total room counts of five, five, and seven rooms, respectively; W) Respondent adjusted Comparable Sales 1, 2, and 3 for both room counts, and Gross Living Area, but failed to maintain in the work file documentation to support the adjustments made; X) Respondent relied on dated sales almost a year old for Comparable Sale 1 (October 16, 2006), and Comparable Sale 2 (November 13, 2006) without adjustment for date of sale; Y) Respondent failed to compute a valuation under the Income Approach and gave no reason why, despite the fact that the MLS listings suggested the possibility of rental income from leasing to seasonal visitors; Z) Under summary of sales comparison approach, Respondent misstated when he said that “All three comps were selected as they are the only sales located on the Lagoon as the subject,” as Comparable Sale 3 is not on a lagoon; AA) Respondent misstated when he said that Comparable Sale 3’s complex had the same amenities as the Subject Property; 7. Respondent provided a printout of 100 properties whose sales closed within six months of the effective date of the Report to substantiate Respondent’s assertion that sales closed within 3-6 months. A copy of that printout is attached hereto and incorporated H:\FREAB\HENTZ. doc 6 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint herein as Administrative Complaint Exhibit 2. 8. While there are properties shown on the printout as having zero days on the market (DOM), there were forty-five entries for properties have in excess of six months on the market, including one having 1666 days on the market. 9. Respondent failed to maintain in the Subject Property work file copies of any supporting documentation to support adjustments made for room count or gross living area, but did provide a single, handwritten explanation for issues arising in the investigation, a copy of which is attached hereto and incorporated herein as Administrative Complaint Exhibit 3. COUNT ONE Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically the Scope of Work Rule, or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT TWO Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 1-1l(a), (bob), and (c), or other provision of the Uniform Standards of Professional Appraisal HAFREAB\HENTZ.doc 7 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT THREE Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 1-2(h), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT FOUR Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 1-4(a), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT FIVE Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 1-6(b), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT SIX Based upon the foregoing, Respondent has violated a standard HAFREABIHENTZ.doc 8 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint for the development or communication of a real estate appraisal, specifically Standards Rule 2-1(a) and (b), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT SEVEN Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 2-3, or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT EIGHT Based upon the foregoing, Respondent is guilty of having failed to exercise reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT NINE Based upon the foregoing, Respondent is guilty of failure to retain records for at least five years of any contracts engaging the appraiser's services, appraisal reports, and supporting data assembled and formulated by the appraiser in preparing appraisal reports in violation of Section 475.629, Florida Statutes, and, therefore, in violation of Section 475.624(4), Florida Statutes. WHEREFORE, Petitioner respectfully requests the Florida Real H:\FREAB\HENTZ.doc . 9 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint Estate Appraisal Board, or the Department of Business and Professional Regulation, as may be appropriate, to issue a Final Order as final agency action finding the Respondent(s) guilty as charged. The penalties which may be imposed for violation(s) of Chapter 475 of the Florida Statutes, depending upon the severity of the offense(s), include: revocation of the license, registration, or certificate; suspension of the license, registration or certificate for a period not to exceed ten (10) years; imposition of an administrative fine of up to $5,000 for each count or offense; imposition of investigative costs; issuance of a reprimand; imposition of probation subject to terms including, but not limited to, requiring the licensee, registrant, or certificate holder to complete and pass additional appraisal education courses; publication, or any combination of the foregoing which may apply. See Section 475.624, Florida Statutes and Rule 61J71-8.002, Florida Administrative Code. The penalties which may be imposed for violation(s) of Chapter 455 of the Florida Statutes, depending upon the severity of the offense(s), include: revocation of the license, registration, or certificate; suspension of the license, registration, or certificate for a period not to exceed ten (10). years; imposition of an administrative fine of up to $5,000 for each count or offense; imposition of investigative costs; issuance HAFREAB\HENTZ. doc 10 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint of a reprimand; imposition of probation subject to terms including, but not limited to, requiring the licensee, registrant, or certificate holder to complete and pass additional appraisal education courses; publication; restriction of practice; injunctive or mandamus relief; imposition of a cease and desist order; or any combination of the foregoing which may apply. See Section 455.227, Fla. Statutes and Florida Administrative Code Rule 61J1-8.002. SIGNED this \ day of , 2008. Florida Department of Busi and Professional Regulation Thomas O’Bryant, Jr., Director, Division of Real Estate ATTORNEY FOR PETITIONER Re ine Lindamood Legal Section 400 W. Robinson Street, N801 Orlando, Florida 32801-1757 (407) 481-5632 (407) 317-7260 - FAX PCP: MR/CK 8/08 H:\FREAB\HENTZ. doe ior Attorney FC- Bam Ne. 0304 7°96 FDBPR v. John L. Hentz Case No. 2008006936 Administrative Complaint NOTICE TO RESPONDENTS PLEASE BE ADVISED that mediation under Section 120.573 of the Florida Statutes, is not available for administrative disputes involving this type of agency action. PLEASE BE FURTHER ADVISED that pursuant to this Administrative Complaint you may request, within the time allowed by law, a hearing to be conducted in this matter in accordance with Sections 120.569 and 120.57 of the Florida Statutes; that you have the right, at your option and expense, to be represented by counsel or other qualified representative in this matter; and that you have the right, at your option and expense, to take testimony, to call and cross-examine witnesses, and to have subpoena and subpoena duces tecum issued on your behalf if a formal hearing is requested. PLEASE BE FURTHER ADVISED that if you do not file an Election of Rights form or some other responsive pleading with the Petitioner within twenty-one (21) days of receipt of this Administrative Complaint, the Petitioner will file with the Florida Real Estate Appraisal Board a motion requesting an informal hearing and entry of an appropriate Final Order which may result in the suspension or revocation of your real estate license or registration. Please see the enclosed Explanation of Rights and Election of Rights form. ; H:\FREAB\HENTZ.doc 12 John Hentz : . Individual Condominium Unit Appraisal Report ie# 07-1912 ‘The purpose of this summary appraisal report is to provide the lende/oent with an accurate, and adequately supported, opinion of the market value of the subje Property Address 6903 N Lagoon Dr Unit # 32 City Panama City Beach State Fi. ZipCode 32408-5966 Sorower Charles Whitman’ Owner of Public Record Charles Whitman County Bay County Legal Description Grand Lagoon Cove Condominums Unit 32 — ‘Assessor's Parcel # 30585-991-232 Tax Year 2008 RE. Taxes $ Project Name Grand Lagoon Cave Condominums Unit 37___ Phase # ‘Map Reference Bay County Census Tract (0026.02 Occupant XJ Owner [J Tenant _(_] Vacant ‘Special Assessments $ HOA$ 152.00 [J per year_5<} per month EJ Property Rights Appraised [}<] Fee Simple [] Leasehold [_] Other (describe) Assignment Type [| Purchase Transaction [XJ Refinance Transaction (_] Other (describe) LendeyClient__AccuPrime Group LLC 7 Address 1742 B W. 15th St, Panama City, Fi. 32401 {s the subject property currently offered for sale or has it been offered for sale in hg weve ‘months prior to the effective date of this appraisal? Yes_O< No Report dala source(s) used, offering price(s), and date(s). 1 [J did OX) di not anaiyze the contract for sale for the subject purchase transaction. Explain the resutts at the analysis of the contract for sale or why the analysis was nat performed. The purpose of this report is for mortgage re-finance. No prior sale of the 3 selected comps was noted within the past year. Subject has not been listed for sale within past 12 months. Feq Contract Price $ N/A. Date of Contract_N/A 1s the property seller the owner of public record? (_]Yes_{|}No_Data Source(s) N/A 1s there any financial assistance (laan charges, sale concessions, gif or downpayment assistance, etc.) to be paid by any party on behalf of the borrower? Chyes &)NO Fs If Yes, report the total dolar amaunt and describe the tems to be paid. _ None Known TNote: Race and the racial composition of the neighborhood are nat appraisal factors. E af Uctiaract ti falising:Fren _ Condominium Hots Location ("] Urban {3<] Suburban (-] Rural | Property Values {_] Increasing _[x] Stable Dectining | __PRICE AGE PA Buit-Up 5 Over 75% [| 25-75% {| Under 25% [Demanc/Supply [_] Shortage O<] inBalance [_] Over Supply | $ (000) __{yrs),_| 2-4 Unit 10% {Growth (} Rapid ¢ Stable [Slow {Marketing Time [_] Under 3 mins x] 3-6mhs (| OverSmihs | 40 Low New { Multi-Family % F4 Neighborhood Boundaries ‘The neighborhood is considered those properties along and near Front Beach 500 High 25 _| Commercial 10% eq Road from Thomas _Drive west to Philfips Inlet. 400_ Pred. 410} Other % Neighborhood Description The subject is situated at a resort area known as Panama City Beach. The neighborhood is mixed ic. composition which is ‘common for the area, not adverse, Residential and tourist oriented support facilities are within a reasonable distance. No adverse conditions were noted. Market Conditions (including support for the above conclusions) Research revealed increasing value trends over the recent past. Demand/Supply is in balance, Marketing time for the subject neighborhood is typicat in comparison to competitive neighborhoods. Competitive listings reiate an active market. Financing is readily available to qualified purchasers. Seller concession will be adjusted to provide cash equivilancy. Topography Lev.at Gd., Slopes to Lagoon Sie Typical Density Average for Area View Good-Lagoon Specitic Zoning Classification Condominum Zoning Description Residential Zoning Compkance {| Legal _(_] Legal Nonconforming — Oo the zoning regulations permit rebuilding to current density? Yes [J No Unknown. No Zoning [—] Megal (describe) Is the highest and best use of subject property as improved (or as proposed per plans and specifications) the present use? Bayes [No Ii No, describe ilies Public Other (describe) Pubile Other (describe) Ofi-site Improvements - Type Public Private Electricity Od [I] Water. ef Street_ Asphalt KOT Fa] Gas amas Sanitary Sewer bd LJ] Alley None ial ia Fa FEMA Special Flood Hazard Area | | Yes D<]No_ FEMAFlood Zone X FEMA Map # 12005C0317G FEMA Map Date_ 9/18/2002 Ae the utes and off-site improvements typical forthe market area?__—(<} Yes__[] No_ If No, describe ‘Ave there any adverse site conditions or extemal factors (easements, encroachments, environmental conditions, tand uses, etc.)? C1 Yes TX] No ites, describe A project survey was not available to the appraiser. A visual inspection did not reveal any adverse conditions. Data source(s) for project information Property Appraiser, Files, Owner Project Description Garden [_] Mid-Rise_{_} High-Rise # of Stories 2 Exterior Walls Stucco__|# af Units H # of Phases, 4 # of Planned Phases. INF. # of Elevators 0 Root Surface Metal __ | # of Units Completed I54_|# of Units 54_| # of Planned Units INVA, Existing [[} Proposed {Total # Parking 84 # of Units For Sale lunk_| # of Units for Sale. lunk _|# of Units for Sale INA Under Construction“ __{Ratto (spaces/units) 1.52 # of Units Sold IS4_[# of Units Sold lunk_{# of Units Soid INZA ‘Year Built 1984 # of Units Rented lunk _|# of Units Rented lunk _{# of Units Rented. IN/A, Effective Age_ 10 # of Owner Occupied Units. # of Cwner Occupied Units Project Pamary Occupancy 4 Management Group - Dx) Homeowners’ Association [] Management Agent - Provide name of management company. Developer Does any single entity (the same individual, investor group, corporation, etc.) own more than 10% of the total units in the project? Lives EX No__ Yes, Describe [Was the project created by the conversion of existing building(s) into a condominium? {XX} Yes_(_} No_K Yes, describe the original use and date of conversion. ‘Are the units, common elements, and recreation facilities complete (including any planed rehabilitation for a condaminkum conversion}? El Yes _[.] No if No, describe TS there any commercial space in the project? _[_] Yes DX] No_11 es, describe and indicate the averal percentage ofthe commercial space. ADMINISTRATIVE COMPLAINT: EXHIBIT #. Freddie Mac Form 465 March 2005 Page 1 of 6 Fannie Mae Form 1073 March 2005 Form {073 — “TOTAL for Windows” el byala made, "ERAT # ae PAGE# 52 Individual Condominium Unit Appraisal Report te# 07-1912 Ions ‘the condition of the project and quality of construction. __ The project appears to be well maintained and has a very clean, neal appearance. The quality of the construction is average. The appeal to the market is average for projects of this size. Describe the common elements and recreational facilities. Swimming Pool, Clubhouse, Tennis Courts, Dock Are any corimon stements leased to or by the Homeowners’ Association? Yes x] No_i Yes, describe the rental terms and options. Is the projet subject to a ground rent? [1 Yes Oc No ites, $ per year (describe terms and conditions) PROJECT INFORMATION Are the parking facies adequate forthe project size and type? Yes [| No No describe and comment on te effect on value and marketabiy Mi Ll dd Do dano analyze the condominium project budget for the current year. Explain the results of the analysis of the budget (adequacy of fees, reserves, etc,), or why the analysis was not performed, _It was not provided. a Fe Ae thre any oho ees (other than ragular HOA charges) forthe use ofthe project aiies?’ [1 Yes Ba] No Wes, report the charges and descibe. No other fees Ey other than those included in the HOA dues. FE] compared to tier compeltve projets o sitar qaly and design he subject unk change appears] Wah BQ) Average [low High or Low, describe is few Are there ‘any special or unusual characteristics of the project (based on the condominium documents, HOA meetings, ar other information) known to the appraiser? Clyes {| No __ ifs, describe and explain the effect on value and marketability, No unusual or adverse factors are noted which negatively affect marketability. Wy unit Charge $_152.00, permonihxi2=$ 1,624.00 _peryear Annual assessment charge per year per square feet of gross iving area = $ 2.43 Uiities inciuded in the anit monthly assessment [| None [Heat [J Air Conditioning [J Electicity |"! Gas 5] water